Retirement is the greatest party of your life, but only if you can afford the cover charge. Your friends can’t spot you on this one. Get your money.
$$$ This Is How You Get Money $$$
Here are some things to consider when saving for retirement:
- Compound interest is the most important concept to understand. The earlier you can start saving the better.
- Congress incentivizes you to save for retirement by offering tax breaks, take advantage of them.
Here are three tips on how to do just that (as a reminder, this is not investment advice):
- If your job offers a 401(k), this is absolutely the best place to start investing. If you have no idea what to actually invest in, pick a target date fund with a year in the title close to the year you will turn 65. A target date fund is an investment that adapts with your age getting less risky as it gets closer to its target date, the date you will start to pull money out of the fund.
- If your company offers a 401(k) match, take advantage of it. They might offer a match of something like 50% up to 4% of your contributions. So, if you put in 4% of your salary, they will match half of that. And that’s free money, it’s a no brainer money!
- If your company doesn’t offer a 401(k), you can still open an IRA or an Individual Retirement Account. Many online investment companies make it super easy AND you have until the tax deadline of April 15th to contribute for the prior year. For 2020 you have up till April 15th to get a tax deduction for 2019.
Remember, everyone has to save for retirement but don’t feel like you’re so behind. Your prime earning years are age 35-55. For most listeners you’ve got plenty of time to catch up on a bigger salary.